Looks pretty much the same camera re-badged as Leica. The 4x zoom isn't much if this will be your full time camera. It all depends on your usage. I purchased two DMZ-1 for my daughter and g/f. They have OIS and a Leica 10-1 optical zoom. The are very simple cameras no manual controls or RAW, but the image is good for their snaps.

I'd go Leica for two reasons, 1) With the Leica you get PS Elements 4 and with the Panasonic you get Arcsoft Photo Impressions. and 2) A Leica badge is worth a few extra bucks. And with the Leica you get an 64mb SD card which is nearly worthless, you can get 6 shots on that card, but its still a card nonetheless. The Panasonic does have internal memory, the Mike's Camera page has more fluff than fact... nothing on internal memory.